New Jersey business and industry leaders reiterated their concerns about a plan to borrow $4.5 billion from the federal government that Gov. Phil Murphy says is needed to meet budget shortfalls due to the novel coronavirus pandemic.
The Select Commission on Emergency COVID-19 Borrowing heard from leaders before approving the borrowing plan unanimously. The Commission includes Senate President Steve Sweeney, Assembly Speaker Craig Coughlin, Sen. Paul Sarlo, chair of the Senate Budget and Appropriation Committee and Assemblywoman Eliana Pintor Marin, chair of the Assembly Budget Committee.
Chris Emigholz questioned a $1.4 billion difference in revenue estimates between the Murphy administration and the Office of Legislative Services and a $2.5 billion budget surplus.
“A shortfall has two sides, and increased surplus and spending on local projects unrelated to the crisis should not be used to inflate the spending side of that shortfall, said Christopher Emigholz, vice president of government affairs for the New Jersey Business and Industry Association. “Revenue estimates that historically underperform the OLS projections should not be used to augment the shortfall on the revenue side.”
Anthony Russo, president of the Commerce and Industry Association of New Jersey, said his members were “stunned” by items included in the budget that included a tax on income over $1 million and a corporate surcharge on revenue over $1 million.
The budget is confusing and there are questions over whether $2.5 billion in remaining funds from the federal Coronavirus Aid, Relief and Security Act will be used.
“It seems more can be done in order to provide clarity,” Russo said.
The budget approved by the Legislature last week on party lines will be signed by Murphy at 1 p.m. Tuesday.
Coughlin said the borrowing is necessary to make sure the state can survive any downturns during the pandemic.
“The State Treasurer has estimated billions in loss of revenue. New Jersey is in the middle of an economic tsunami that required an extraordinary action,” Coughlin said in a statement. “While not ideal, we must borrow the necessary funds through bonding.”
Sweeney said it is unfortunate the state is in this situation.
“New Jersey has a lot of problems, that no secret but we’ve got to get serious with fixing the finances of this state,” Sweeney said. “These are tough times. We need to be very judicious with our borrowing and we have to make sure if we get better numbers and things improve that we reduce the amount of money we borrow.”